Here’s a great speech by Mark Sellers to Harvard graduates.
It’s titled So You Want to Be the Next Warren Buffett and discusses 7 traits you need to be different.
Trait #1 – Ability to buy and sell stocks against the market
Trait #2 – Obsession
Trait #3 – Willingness to learn from past mistakes
Trait #4 – Inherent sense of risk based on common sense
Trait #5 – Confidence and Conviction
Trait #6 – Get both sides of your brain working
Trait #7 – Ability to live through volatility
You learn to distinguish the good traders from the bad, the successful techniques from the unsuccessful, and the good habits from the faulty. You also learn to distinguish the lover from the fighter, the winners from the losers, the serious from the frivolous, the cerebral from the superficial, and the friend from the foe. But above all, you learn that the psychological makeup of the trader is the single most critical element of success.
“Wall Street people learn nothing and forget everything.” Ben Graham
“ Buy on the cannons, sell on the trumpets.” Old French Proverb
“A stock broker is one who invests other people’s money until its all gone.” Woody Allen
“It is fortunate for Wall Street as an institution that a small minority of people can trade successfully and that many others think they can.” Ben Graham
“Wall Street indices predicted nine out of the last five recessions!” Paul Samuelson
“ There are two kinds of investors, be they large or small: those who don’t know where the market is headed, and those who don’t know that they don’t know. Then again, there is a third type of investor –the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.” William Bernstein
“The point is, ladies and gentleman, that greed, for lack of a better word, is good. Greed is right, greed works. Greed clarifies, cuts through, and captures the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge has marked the upward surge of mankind.” Gordon Gekko
“It’s not whether you’re right or wrong that’s important, but how much money you make when you’re right and how much you lose when you’re wrong.” George Soros
“October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” Mark Twain
“If past history was all there was to the game, the richest people would be librarians.” Warren Buffett
“Wall Street is the only place that people ride to in a Rolls Royce to get advice from those who take the subway.” Warren Buffett
“A market is the combined behavior of thousands of people responding to information, misinformation and whim.” Kenneth Chang
“The four most dangerous words in investing are “This time it’s different”. John Templeton
“Money can’t buy you happiness but it does bring you a more pleasant form of misery.” Spike Milligan
“If you don’t follow the stock market, you are missing some amazing drama.” Mark Cuban
“The average man doesn’t wish to be told that it is a bull or a bear market. What he desires is to be told specifically which particular stock to buy or sell. He wants to get something for nothing. He does not wish to work. He doesn’t even wish to have to think.” Jesse Livermore
“In this business if you’re good, you’re right six times out of ten. You’re never going to be right nine times out of ten.” Peter Lynch
“ Markets can remain irrational longer than you can remain solvent” John Maynard Keynes
“The markets will return to rationality the moment you have been rendered insolvent.” Dennis Gartman
“Risk is good. Not properly managing your risk is a dangerous leap” Evel Knievel
“Sometimes your best investments are the ones you don’t make.” Donald Trump
“The most predictable thing about the stock market is the number of experts who take credit for predicting it.” Dave Weinbaum
“I have probably purchased fifty ‘hot tips’ in my career, maybe even more. When I put them all together, I know I am a net loser.” Charles Schwab
“Money talks… but all mine ever says is good-bye.” Anon
“Don’t gamble! Take all your savings and buy some good stock and hold it ‘till it goes up, then sell it. If it don’t go up, don’t buy it.” Will Rogers
“Give me a stock clerk with a goal and I’II give you a man who will make history. Give me a man with no goals and I’II give you a stock clerk.” James Cash
“Never make forecasts, especially about the future.” Samuel Goldwin
“Stocks are bought on expectations, not facts.” Gerald M. Loeb
“Your success in investing will depend in part on your character and guts, and in part on your ability to realize at the height of the ebullience and the depth of despair alike that this too shall pass.” John Bogle
“You make most of your money in a bear market, you just don’t realize it at the time.” Shelby Davis
Why traders wins
1. Develop specific procedures.
2. Have a defined operational methodology.
3. Understand how your trading system works.
4. Be sufficiently capitalized.
5. Don’t take quick profits.
6. Begin using a system after it draws down.
7. Be willing to accept consecutive losses.
8. Don’t think too much.
9. Don’t set specific price target.
10. Don’t believe the tight stop loss myth.
11. Play your own game-avoid the news.
Why traders loses
1. Lack of defined methodology.
2. Poor self control and discipline.
3. Information overload.
4. Riding losses.
5. Taking profit quickly.
6. Poor understanding of system basics.
7. Lack of consistency.
8. Too emotional and suggestible.
9. Too close the makes.
10. Can’t accept more than a few consecutive losses.
1. Bear in mind at the outset that when Darwin was asked by Galton to fill out a questionnaire concerning his main talents in the 1850s, Darwin said his main talent was speculating in the consols.
2. Darwin established a routine. Every day was mapped out the same way for 40 years. Walk before breakfast, work until 11 am. Walk the dog. Listen to wife Emma read the family letters. Lunch. Read the newspapers (to check on his holdings and plan future speculative undertakings and to see what important flexions he could get on his side. Take a nap. Work from 4:30 to 6:30. Small dinner. Play backgammon or billiards. Listen to wife play piano. Such a routine enables you to speculate when you are prepared and not to let emotions interfere.
3. He listened to music every day. The wife played very well. An interlude to take the mind off the fray of the day, and to enjoy another language, gives one insight into the battle for investment survival.
4. Play some backgammon with the kids. Important to stay young at heart or else you’ll be unable to adjust to the new things and ever changing cycles.
5. He had a secret mirror to warn of the approach of uninvited guests so he could absent hide and pretend not to be home. (Gino Paoloochi had a similar trick, although he often supplemented it by always wearing a hat so he could say “of glad to see you. Sorry I am just going out.”) (more…)
